As previously
reported, Gov. Andrew Cuomo in May empaneled a three-person
wage board (the Board) to study and fix perceived wage inequality
suffered by New York's fast food workers – including by
recommending whether, and by how much, to raise their minimum wage.
Cuomo's actions were a direct response to state lawmakers'
snub of his latest attempt to raise the minimum wage statewide (it
is already slated to increase to $9/hour in 2016, but Cuomo had
tried to raise it to $10.50/hour).

During several meetings held throughout the state earlier this
summer, the Board heard extensive – mostly one-sided –
testimony on the appropriate wage rate for fast food workers. The
Board also expressed concern during the meetings about these
workers' unpredictable schedules, and it considered whether to
set the pay rate for part-time workers higher than that for
full-time workers, so as to incentivize employers to create more
full-time jobs.

The Board's Proposals

Finally, on July 22, the Board revealed its formal proposals, which the New York State Department
of Labor (NYSDOL) is expected to adopt without hesitation.

From the business community's standpoint, the only positive
feature in the Board's proposals is the absence of any
recommendation regarding employee scheduling or distinct pay rates
for part-time workers.

As many in the business community had feared, the Board proposes
increasing the minimum wage rate for "fast food
employees" to $15/hour – an increase to be phased in
over three years for workers in New York City, and over
five-and-a-half years throughout the rest of the state. The Board
has also defined the seminal terms "fast food employee"
and "fast food establishment" incredibly broadly:

A "fast food employee" is:
"any person employed or permitted to work at or for a Fast
Food Establishment by any employer where such person's job
duties include at least one of the following: customer service,
cooking, food or drink preparation, delivery, security, stocking
supplies or equipment, cleaning, or routine maintenance."

A "fast food establishment"
is: "any establishment in the state of New York serving food
or drink items: (a) where patrons order or select items and pay
before eating and such items may be consumed on the premises, taken
out, or delivered to the customer's location; (b) which offers
limited service; (c) which is part of a chain; and (d)
which is one of thirty (30) or more establishments
nationally, including: (i) an integrated enterprise which
owns or operates thirty (30) or more such establishments in the
aggregate nationally; or (ii) an establishment operated pursuant to
a Franchise where the Franchisor and the Franchisee(s) of such
Franchisor owns or operate thirty (30) or more such establishments
in the aggregate nationally." (Emphasis added.)

Despite unanimous praise for the Board's proposals by worker
advocates, the business community is expected to challenge the
legality of the proposals before implementation.

What Does this Mean for My Business?

Given the current political climate, the NYSDOL's review of
the wage Board's proposals should be considered a mere
formality. Entities impacted by the Board's proposals should
therefore view them as practically a sure thing. Coupled with the
recommendation made earlier this year by a separate wage board
– to increase the minimum wage for New York's tipped
workers from $5 to $7.50/hour – the Board's proposals
mean 2016 will be a year of great change for the restaurant
industry. Prudent restauranteurs should start planning for the
change now by consulting with counsel about their options –
which may include reducing workers' hours, cutting staff,
and/or raising prices – to help offset the financial impact
of the coming minimum wage hikes.

This article is presented for informational purposes only
and is not intended to constitute legal advice.

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